Illegal Or Just Unethical? Selling Banknotes You Do Not Own...yet

This is definitely unethical, but it doubt if it's illegal: I don't think it's mandatory for a buyer of a product to give a detailed description of how he or she intends to use the discussed product. If that was the case, I'd be extra happy not to work in an erotic shop, so to say. I've also asked people to hold a product for me in the past while trying to get hold of resources, however never with the intention to make a quick profit on them in this way. That just stinks, big time.
The guy might actually have some legal issues if he now sells these banknotes without being able to get hold of some in the described quality and with proper grading, though, but that doesn't apply to what he did here with SelectCoinCanada.

I think it very well MAY cross the line to illegal if he takes money for something he does not actually own or have the right to sell. (I'm pretty sure people have gone to jail for selling the Brooklyn Bridge.) The injured party, though, would be his buyer.